Invest, Retire, Share, Inspire
  • Blog
  • I believe
  • Seeking Change
    • What are the chances of being born?
    • 23 Little Things That Let You Know You’re In The Right Relationship
    • How We Let People Go
    • 5 Things Men Need To Learn About Women
    • The 10 Traits Of Extremely Successful People
    • You Need To Go After The Things You Want
    • Traits Of A Great Boyfriend
    • My mother's YOLO advise
    • Never let your self-worth diminish
    • The types of people you should and shouldn’t work with
    • Why The Person You Love Should Be Your Favorite Hello And Your Hardest Goodbye
    • Procrastination
  • Investing to Retire
    • Power Of Compounding Interest
    • Why I Invest In US Stock Market?
    • Stock Selection - Predictable Companies ( Part 1 )
    • Stock Selection - Entry Point ( Part 2 )
    • Stock Selection - Company's Ability To Make Money ( Part 3 )
    • Stock Selection - Ways to find great stocks ( Part 4 )
    • Stock Selection - Institutional Ownership ( Part 5 )
    • Technical Analysis aka Charting
    • Companies in my focus
    • Why I do not SHORT the market
    • Using Derivatives Safely - Options Market
    • MOAT
    • When to Sell?
    • Criterias of a business
    • Month's Performance
    • Shorting Stocks
    • 3 Key Ratios
  • Free Book
Contact me

Broke? 

12/6/2015

Comments

 
Does this story sound familiar? Every month you receive your paycheck (or what’s left of it after CPF tears a chunk out of it), only to see your good intentions of “saving” most of it disappear in a wave of credit card bills, utility bills, loan repayments, daily expenses, and bad purchases.

I was taught this. Whats the key difference between a rich person and a poor person? Of course factoring out that you are born with a golden spoon you spoil brat asses.

The rich, saves then spends. The poor spends then saves.
Yup thats all.


Once you’re ready to make the change , these are the 3 money-saving rules:

  • Pay Yourself First
  • Categorize Your Spending


1. Pay Yourself First
When it comes to building your savings, Take Warren Buffet’s famous “save first” quote to heart: “Do not save what is left after spending, but spend what is left after saving.” This piece of advice, paying yourself first, is so simple – but it’s enough to save you from financial disaster.

So what’s the best approach to paying yourself first?

“First, you should open another bank account. Once you’ve “paid” yourself by setting aside a certain amount in your primary account for savings/investments, channel whatever you have left to your secondary account as your shopping budget.”

“That way, you’ll have peace of mind knowing that you saved part of your monthly salary, instead of spending indiscriminately."


2. Categorize Your Spending
While “paying yourself first” is the first commandment of savings, categorizing how you spend your money is just as important. Just think of your paycheck as one big bag of rice that you’re scooping into different buckets. If you ate too much of it without saving some for an emergency – you’ll be starving when famine hits!

So how do you categorize your spending?

Recommend that you divide your funds into the following categories:

  • Savings: Having a pool of emergency funds to tide you over once financial disaster strikes.
  • Investments: Setting aside that portion of “rice” that you’ll grow and harvest in the future.
  • Protection: Buying insurance so that you’re protected from financial risk when accidents/emergencies happen.
  • Expenses: Calculate how much you need to survive on a day to day basis (transportation/food).
  • Retirement: Setting up a Supplementary Retirement Scheme (SRS) or savings account because face it, your CPF is mostly going towards servicing your mortgage.
  • Fun Fund: Setting aside a little bit of money for your monthly retail therapy treatments that keep you out of IMH.




_______

P.S. "wahhhhh suddenly Ken your article is nicely draft, well phrase and neat." Actually no, I copy, paste, edit and change a bit here and there from an article written by Jeff Cuellar in 2013.
Comments

    Teng Kenyuan

    Sharing / Giving /
    Expect Nothing

    Archives

    August 2019
    July 2019
    May 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    July 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014

    Useful Links
    sginvestbloggers.blogspot.sg

    journeywithmoney.com​

    optionsmastery.net

    www.glenho.com
    ​

    RSS Feed